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Diamond in the rough
The diamond industry poses potential for growth. But historically it comes with dangerous liaisons. Jacqueline Gomes reports.
July 19, 2011 1:21 by Eva Fernandes
Thousands of years ago diamonds were used as ornaments and for trade, until young men got the idea that diamonds equate to romance and that no relationship was complete without one, making these gems the epitome of desire. Today diamond prices are soaring, even outpacing gold, and these precious stones are proving to be a popular and equally sound investment.
The worth of diamond has increased by about 15 percent since the 1940’s but took a downturn when the recession started. As the economy picked up, however, so did demand for these gems, pushing its value further up.
High-net worth individuals in the Middle East account for 29 percent of jewellery, gems and watch sales in the world last year. And analysts expect figures globally to rise.
And with the potential financial windfall, it’s hard to pass up the opportunity to make a profit even in times of turmoil.
The latest diamond debacle comes, for example, from Zimbabwe—ever the poster child for blood diamonds.
A ban has been lifted on diamond exports from Zimbabwe that have been held since 2009. The diamonds that were allegedly at the centre of allegations of abuse by Zimbabwean security forces at the Marange mines. So what happens to the diamonds now that its free to leave the country?
Well, the US and the EU do not approve of Zimbabwe being allowed to sell diamonds from these mines, after a global meeting in Kinshasa that did not reach a consensus on what will be done instead.
Mathieu Yamba, who currently chairs the Kimberley Process – the industry-backed certification system that aims to stem the flow of so-called ‘blood diamonds’ – said sales from two mines in the Marange region would be allowed, and insisted after the Kinshasa meeting that took place that monitoring would continue.
But not all diamond discussions are sinister. There are private groups like the Mumbai Diamond Merchants’ Association that understand the need to assist and cultivate the diamond industry in their own country.
A team of workers combing through debris at a recent bombing at Mumbai’s Opera House, India’s largest diamond hub, discovered unclaimed diamonds in the ruble.
Opera House was a recent target of the bombings that took place last Wednesday.
“We have found 65 pieces,” said Jayesh Labdhi, a committee member of the Mumbai Diamond Merchants’ Association trade group. “The diamonds, which are being kept with the association, have not yet been valued”, Labdhi added.
Another member of the MDMA, Sanjay Shah added that the cost of these diamonds is estimated to be around Rs. 25 crore.
What is to be done with these diamonds has not been decided yet, but there are speculations that they may be auctioned off and the proceeds would be used to help those who have been injured, or have lost their lives. It has been reported that a meeting will be held in the next few days to take a decision.